Case Study
This megayacht submission was reported to be wrapping-up a refit, and the application included a recent survey report. On paper, this looked like an acceptable risk. But after much discussion, it was decided that a field risk assessment was in order.
Upon inspection, we found the risk to be substantially different than what we understood it to be, and nowhere near ready for navigation.
The only way a thorough understanding of this risk was possible was through a field risk assessment on behalf of the underwriter. This is not an isolated case.
Every underwriter has a schedule by which they require a client to provide an updated marine survey report. This could typically be every five or ten years. A condition and value inspection performed by a SAMS or NAMS surveyor will cost your client $500-$1000 or significantly more, depending upon the size of the vessel. For an older vessel, the cost of an acceptable marine survey could even exceed the annual premium on the risk. That’s a request that usually doesn’t go over well, for any boat owner.
A Marine Surveyor, hired by the boat owner, works for the owner not the underwriter. If said , and may not be objective. Unfortunately, not every marine surveyor is a member of an organization that has an ethics code, so the surveyor in question may be less than objective. Once your client has a new survey report in-hand, you can expect that he or she will shop around for a better insurance deal. This results in quite a dilemma for the underwriter who needs a clear, objective understanding of the condition and value of the vessel without compromising the sensitive insurer-insured relationship.
In regards to new or near-new hull submissions, underwriting guidelines may not require a Marine Survey report to bind coverage. In more than one case like this, we’ve discovered serious hazards during a brief risk assessment of a brand new large sail or motor yacht.
As a trusted partner, we can successfully perform an abbreviated walk-through inspection of a vessel and produce a written risk assessment report. The activity can be tailored to the individual needs of the underwriter- we can provide an abbreviated report for the vessel owner, which would include safety and maintenance recommendations. Along with reporting on the physical aspects of the yacht, we can “take the temperature” of the safety and maintenance culture on-board. Based on the condition of the vessel, we might recommend that a full survey be performed for continued coverage or renewal. If necessary, we can assist the underwriter in finding a marine surveyor who is qualified to properly inspect the vessel.
The benefits-
This is a program which can be scaled to suit your needs. For example, if you have several yachts in a given area that each require an updated inspection, we can string those together to reduce costs.
You won’t offend your conscientious clients who properly maintain their boats by requiring them to pay for a marine survey which may not be necessary.
This process will allow you to determine which risks on your books suffer from some level of neglect, and/or deferred maintenance. Clearly, “weeding-out” those risks will have a positive impact on your loss ratio and your profitability.